Governance in a Family-Owned Enterprise
What Makes It Different
What makes governance unique in a Family-Owned Enterprise compared to a Non-Family Business Environment? The answer is easy; it’s the Family Factor. As a family business grows from an ‘owner-centric’ founder stage to stages where the ownership group is more diverse, the business and the family have different needs. It’s unlike before when one person was in charge of everything for the family and the business. Now, multiple family branches have a stake in the decisions. So how do you go from one captain steering the ship to many sailors wanting to have a voice in how the ship sails, survives and is run? This is governance, and unlike other organizing models, governance in family-owned enterprises develops into two models: business governance and family governance.
Business Governance is Corporate Governance
Transitioning from a ‘paper board’ that never really meets to family-only boards and eventually to a diverse board of directors made up of family and non-family members is vital as the business grows, thrives, and more shareholders appear. Corporate Board evolution can be daunting for family leaders, moving from strong solo control to effective board decision-making policies, constructive debate, and providing management with oversight and accountability. “Letting go to grow” is our motto, and we walk with you side-by-side to build your corporate governance model.
Family Governance – Creating Alignment and Harmony
The secret to a thriving family enterprise is to separate family and business decisions. This can be hard because people often have multiple roles; they may be family members, family employees, shareholders, board members, or married-in to the family. It’s challenging – or even impossible to escape all conflicts between what they want for themselves versus how well things turn out when their family’s futures are at stake! By creating fair procedures, systems, policies, and transparent decision-making, we help your family create a family governance structure that matches the diverse needs of your unique family enterprise and dodge the potential problems that damage family relationships. Good governance makes family-owned enterprises harmonious; like a beautiful melody, it doesn’t just happen. It takes time, practice, and a well-written sheet of music. Let us help you write a stunning music score!